Think your credit score doesn’t matter? Discover the biggest credit score myths that cost WA borrowers their home loan approvals – and how to fix them.

Why Credit Scores Matter in WA

Snapshot:

If you’re a first-time homebuyer in Western Australia, your credit score can make or break your loan approval – but misinformation often does more damage than the number itself.

From believing that checking your own report hurts your score to thinking all lenders use the same system, these myths can quietly derail your dream of owning a home in Perth.

Let’s debunk the 7 most common credit score myths in WA – and give you practical ways to build a stronger credit profile before you apply.

Myth 1: Checking Your Own Credit Score Lowers It

The truth:
Checking your own credit score is called a “soft enquiry” and has no impact on your score.

In fact, regularly reviewing your credit report through platforms like Equifax, Experian, or illion (Australia’s three main credit reporting agencies) helps you spot errors early.

Tip:
Order a free credit report once every 12 months – or any time you’re denied credit. Always use official sources, not paid third-party websites.

Myth 2: One Missed Payment Doesn’t Really Matter

The truth:
Even a single missed payment (over 14 days late) can appear on your report for up to two years, depending on the severity.

WA lenders see this as a red flag for reliability-especially if you’re applying for a home loan or car finance.

Example:
Sarah from Perth missed a $90 phone bill last year and assumed it wouldn’t count. When she applied for her home loan, the lender flagged it, delaying her approval for weeks.

Quick Fix:
• Set direct debits or reminders for bills.
• Contact the provider early if you can’t pay – they may not report it if you act fast.

Myth 3: All Lenders in WA Use the Same Credit Score System

The truth:
Each lender has its own scoring model. Some weigh income stability more, while others focus on repayment history or total debt exposure.

That means you could be rejected by one lender-but approved by another.

WA Context:
Major banks like Westpac or NAB may use national data, while local credit unions or non-bank lenders may rely more on recent behaviour.

Tip:
Work with a WA-based mortgage broker who understands different lenders’ criteria and can match you to one that suits your credit profile.

Myth 4: Having No Credit History Means You Have a Good Score

The truth:
No credit history often means no score at all. Lenders can’t see how you manage repayments, so you appear as an unknown risk.

Build a healthy record by:
• Using a low-limit credit card responsibly
• Paying off purchases on time
• Keeping your credit utilization below 30%

Think of it like a report card: You can’t get an “A” if there’s nothing to grade.

Myth 5: Old Defaults Don’t Matter Anymore

The truth:
Defaults (missed payments over 60 days) can stay on your report for five years, even after they’re paid.

Lenders in WA look at patterns – a single old default may not ruin your chances, but multiple defaults signal risk.

Pro Tip:
If you’ve cleared old debts, ask the creditor to mark them as “paid” on your credit file. It improves perception, even if the record remains.

Myth 6: All Credit Reports Show the Same Information

The truth:
Different reporting agencies may hold slightly different data – not all lenders report to all three.

That’s why it’s smart to check all three credit reports (Equifax, Experian) to ensure accuracy.

Common WA error:
Sometimes, utility providers report under your maiden name or old address, causing duplicate entries. Always check your personal details carefully.

Myth 7: A “Good” Credit Score Guarantees Loan Approval

The truth:
A good score helps – but it’s not everything. Lenders also assess:
• Your income stability
• Employment history
• Deposit amount
• Debt-to-income ratio

So yes, you can have a good credit score in WA and still be denied if other factors don’t add up.

Example:
A Perth couple with an excellent credit score but heavy credit card usage was declined because their total debt exceeded lender thresholds.

What Actually Affects Your Credit Score in Australia

How to Improve Your Credit Score in WA

1. Check your credit report regularly for mistakes

2. Pay bills on time, even small ones

3. Avoid multiple loan applications within short periods

4. Reduce credit card limits if not needed

5. Keep old accounts open to show long-term credit responsibility

6. Work with a local mortgage broker who can review your report and guide you on lender preferences

Final Takeaway: Don’t Let Credit Myths Hold You Back

Your credit score doesn’t need to be perfect – it just needs to accurately reflect your financial habits.

Understanding how it works (and what’s myth vs. fact) puts you ahead of most borrowers in WA.

Next Step:
Check your free credit report today, or speak with a local mortgage specialist who can review your credit and help you plan for approval success.

Disclaimer

The information in this article is general in nature and does not constitute financial advice. You should consider your own circumstances and seek professional guidance before making financial decisions.